On the surface, the idea of playing with construction toys does not seem to align with the changing expectations of kids and parents. In many regions, sales in the construction category have dipped in recent years, hit by the growing popularity of video games and kids spending more hours consuming entertainment on mobile screens. However, several toy manufacturers have taken on the challenge and adopted the path of innovation, which enabled the construction category to bounce back last year. Moreover, the global market for construction toys is expected to register a 3% compound annual growth rate (CAGR) from 2018-2023, which is above the traditional toys industry average, with positive forecasts in markets such as the U.S., China, Mexico, Germany, and South Africa.

Seamless Integration of Physical and Digital Worlds

High social media usage among preteens is not surprising anymore, and even younger cohorts are starting to catch up as they are empowered by increased access to smart devices. According to Euromonitor International’s Lifestyle Survey 2019, more than half of U.S. kids ages 0-5 years and 6-12 years have access to a tablet with full capabilities, and similar levels of access are recorded in the Western European and Chinese markets.

Furthermore, access to gaming systems is also high, and in China there has been a significant rise among kids ages 0-5 years, from 19% in 2015 to nearly 27% this year. Smartphones are also well within the reach of kids. Translating access into activities, 60% of kids ages 0-5 and 6-12 visit or update social networking sites on mobile phones almost every day, with activities such as watching TV and playing games following close behind.

With kids increasingly digitally engaged, the amount of attention paid to traditional forms of play is decreasing. Digital integration and seamless transition between physical play and the digital world are key to winning innovation, as attested by the recent evolution and success of LEGO. The company has introduced individual mobile apps that bring more action and create storylines for different ranges of building sets. Furthermore, LEGO launched LEGO Life, an online platform combining all three popular digital activities — games, TV, and social media. More recently, the Danish manufacturer has collaborated with Blizzard Entertainment to create a line of figurines based on the popular shooter game Overwatch. LEGO’s efforts to embrace the digital challenge and redefine the meaning of play have not only helped the company reverse its revenue dip, but have also improved its relevance to boys — a demographic group that has become hard to please in view of the excitement generated by the ever-dynamic and interactive world of online and mobile gaming. Euromonitor International global surveys indicate that while the proportion of gamers among kids has gone up across boys and girls, boys demonstrate a higher proportion of frequent gamers across countries.

LEGO Duplo Jurassic World, from LEGO

Opportunity to Integrate STEM Concepts

Many of today’s parents are seeking products that can help their kids develop cognitive and social skills as well as fuel creativity and imagination. However, STEM toys have yet to find a wide consumer base, often due to the high prices. Nonetheless, manufacturers of construction toys have been embracing ideas that successfully incorporate science and technology into their products. Take LEGO Duplo, for example. Duplo’s Coding Train allows kids to explore coding concepts by teaching them sequences and conditions.

As LEGO continues to explore and redefine its construction toys for the new age of play, others have also been seeking to take play to the next level. LeapFrog is the newest player to enter the construction category with LeapBuilders, a product line designed for babies ages 18 months and up. LeapBuilders’ blocks are interactive and incorporate technology into the play, further responding to the changing physical play in times of age compression and early exposure to technology.

Design & Drill Convertible

Design & Drill Convertible, from Educational Insights

Looking Forward

There is no reversing the trend of kids engaging more with smart devices and the digital world, redefining playtime and screen time. The traditional toys and games industry must adapt more quickly than ever to connect with kids on a new level. LEGO’s ability to reverse the negative revenue trend showcases a successful formula that seamlessly connects the physical and digital worlds.

As the traditional toys and games domain has been losing its boys audience to video games, seamless integration can help raise the level of excitement and show the relevance of traditional “building blocks,” often seen as a foundation of play, in modern-day playtime.

Additionally, innovation in construction toys raises awareness of STEM-related products and designs. Given the significantly higher levels of mobile activity and engagement among kids in middle- and high-income households, in countries such as the U.S., this type of innovation opens up opportunities to build a wider customer base through innovation that would appeal to both parents and kids in these households by transporting them into the world of science and technology through exciting new formats.

Ellen Chen is a research associate at Euromonitor International, based in the Chicago office. In her role, Chen conducts research for the home and technology research team, focusing on the North American market. Her work provides strategic insights on relevant trends, innovation, and growth opportunities throughout the industry.

This article originally appeared in the July/August 2019 issue of the Toy Book.